Abstract
The demand for energy has been increasing significantly worldwide. Consequently, carbon emissions have accelerated, since energy usage involves carbon dioxide. Given that the available energy has quantitative restriction feature, efficient usage of energy becomes crucial. Energy efficiency is expected to improve over time with technological advancements. However, the adoption of low-carbon energy technology caused by the growing concern about carbon emissions may actually offset energy efficiency, owing to the higher cost compared with traditional energy methods. We conducted a stochastic frontier analysis to examine energy efficiency in the views of both economic and ecological aspect view during 1995–2016 for 21 emerging countries selected from Morgan Stanley Capital International, using energy consumption, economic complexity index and the other factors of production based on the Cobb-Douglas production function. Mexico was identified as one of the most energy-efficient countries; however, Mexico could not be classified as real energy efficient, as it demonstrated the highest carbon inefficiency level. We also categorized countries demonstrating increased economic energy efficiency and decreased carbon inefficiency as frontier country, and identified six such countries.
Highlights
The demand for energy has been rising rapidly worldwide
Traditional energy efficiency methods usually consider energy intensity as a proxy for energy efficiency, which implies that the economic output represents productivity
A country characterized by a capital-intensive economy tends to have high energy intensity
Summary
There are two representative ways to estimate energy efficiency: Data Envelopment Analysis (DEA) and SFA. Filippini and Hunt[26] analyzed the residential sector’s energy efficiency for a panel of 48 states using stochastic energy demand frontier analysis. They considered various components, including energy consumption, income, and energy price by utilizing the functional form of demand. They selected population, household size, and climate condition variables (Heating degree days and Cooling degree days). Given that existing literatures chose such countries, we can conclude that previous studies on energy efficiency analysis mainly focused on developed countries. These countries will be a interesting subject since they are still undergoing transition
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